Inflation in South Africa is expected to go down over the next two years raising hopes of a rate cut later this year.

The 2024 second quarter inflation expectations survey by the Bureau for Economic Research shows that on average inflation is anticipated to be at 5.3 percent this year.

The forecast by analysts, businesspeople and trade union officials reveals that this is a downward adjustment of 0.1 percentage points for this year.

This is good news for consumers facing the high cost of burrowing. Economist at the Bureau for Economic Research Nicolaas van der Wath explains.

“Why it’s subsiding at this stage is because the Reserve Bank policy seems to be working at this stage. You know that they hiked interest rates a lot up until last year with the aim of bringing down inflation and we can see now that in the in the expectations is coming down. The Rand also strengthened a little bit against the US dollar and other currencies on the international markets. That makes our response a bit more positive.”